On January 10, 2019, Jackson Company purchased a machine to mold components for one of its products.

Question:

On January 10, 2019, Jackson Company purchased a machine to mold components for one of its products. Total cost of the machine was $430,000. It is expected to produce 450,000 units and to have a salvage value of $25,000. The company used the units-of-production method of depreciation.
a. In 2019, it produced 45,000 units. Compute the depreciation expense for 2019.
b. During 2020, 60,000 units were produced. Compute the depreciation expense for 2020.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...